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Who has more bottle? High Court rules in industrial design dispute - International Law Office

Intellectual Property - Malaysia

Who has more bottle? High Court rules in industrial design dispute

May 09 2011

In Tropicana Products Inc v F&N Beverages Manufacturing Sdn Bhd the plaintiff filed an action against the defendant in the High Court alleging industrial design infringement, and applied for an interlocutory injunction to restrain the defendant from using a particular bottle design which allegedly infringed the plaintiff's registered industrial design, among other things.

The plaintiff and the defendant were subsidiaries of internationally renowned beverage manufacturers which manufacture and sell fruit drinks in attractive bottles. The plaintiff and Fraser and Neave Limited (F&N), the defendant's ultimate parent company, are the proprietors of registered industrial designs for bottles bearing registration numbers MY-06-00624 (plaintiff's design) and MY 09-00855-0101 (F&N design) registered in Malaysia on February 10 2006 and April 21 2009, respectively. Photographs of the Tropicana Twister and F&N Fruit Tree beverages are displayed below.

The defendant contended that the plaintiff's design was invalid because it was not new on the date of application for design registration. The defendant alleged that the main feature of the plaintiff's design - the swirl design on the panel of the bottle - had been published since 2004 in the form of the Pokka Green Tea bottle. The plaintiff denied this. Apart from the swirl design, the defendant contended that the other features of the plaintiff's design were nothing more than functional features which were present in generic bottles used in the hot-fill process, and that there were other brands of beverage in the market using bottles with ribs which looked similar to the plaintiff's design. The defendant relied on the principle that where the alleged novelty in a design is small, minor differences between the alleged infringing design and the registered design will be sufficient to avoid infringement. The defendant further argued that the shape and design of the F&N design was materially different from the plaintiff's design, even if the plaintiff's design was novel.

The defendant also relied on principles of passing off and submitted that there would be no confusion between the plaintiff's beverages and the defendant's beverages because consumers would place emphasis on the brand name, get-up and packaging, among other things, as opposed to the shape or appearance of the bottle. In addition, the plaintiff's mark and the defendant's mark were prominently displayed on their respective products, thus negating any likelihood of confusion.

The plaintiff challenged F&N's right to the F&N design on the grounds that the deed of assignment which assigned the title to F&N was not signed by F&N and was made without consideration. The defendant argued that since the deed was a contract under seal, no consideration was required and, in any event, consideration for the assignment existed between the parties in the form of one of the terms of a transaction or a series of transactions between the assignor and F&N.

On the issue of the balance of convenience, the defendant argued, among other things, that:

an injunction would cause maximum disruption to its business, as it had commenced manufacturing and sales of the Fruit Tree beverage on a substantial basis;

its goodwill and reputation would be adversely affected as it would have to recall its products from the market;

it would be exposed to potential claims of breach of contract by its suppliers and customers;

as there was no evidence of the plaintiff's financial standing and its ability to pay damages, the defendant would suffer as a result of granting interlocutory injunction; and

the grant of an interlocutory injunction would be tantamount to final disposal of the action since it would not want to remain idle for months or years as it awaited the pending final disposal of the action and would most likely change to a new get-up or design.

The court found that there was a serious issue to be tried, but concluded that damages would be an adequate remedy for the plaintiff. The court also held that there would be no likelihood of confusion as the brand name and get-up of the plaintiff and the defendant's beverages were different. The court agreed that the defendant would suffer irreparable damage if an injunction were granted. Accordingly, the court held that the balance of convenience was against granting an interlocutory injunction and dismissed the plaintiff's application with costs.

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